Jerome Powell Speech: Fed Chair Break Silence on Inflation, Tariff War

Fed Chairman Jerome Powell gave his first speech after the Federal Open Market Committee (FOMC) decided to keep interest rates unchanged. Considering the current economic outlook, the Fed Chair noted that its policies are strong for now. Powell noted that the Fed will continue to watch inflation gauges for changes as part of its measures to maintain economic stability and stem inflation.

Jerome Powell Speech: Quantitative Easing Begins

As reported earlier by CoinGape, the Fed maintained interest rates at 4.5%. Powell stated in his speech that the inflation outlook is transitory with the Donald Trump-induced tariff in North America. 

Speaking on the inflationary trend, the Fed Chair referenced measures from the Bank of Canada to prevent the bloated surge in the price of goods owing to the tariff war. He said the US measures to tighten or loosen gauges to prevent inflation challenge the FOMC. However, he noted that the United States is not at the level where it will be concerned about the longer-term impact of the trade war.

Ahead of the March FOMC Meeting, the forecast to keep interest rates unchanged was resounding. However, speculations trailed the broader Quantitative Easing (QE) outlook. In line with this, the Federal Reserve Chairman has provided definitive guidance.

“The Committee will slow the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $25 billion to $5 billion,” outlining its measures to begin QE.

Jerome Powell said this year that the Fed will adapt based on the market outlook.

Tariff War and Economic Expectation

While the Trump administration has masked the market with tariff concerns, Jerome Powell said in his speech that this trend is partly to blame for the current inflation level.

However, he hinted that the tariff war does not influence all economic activity. He cited the service sector as insulated from this trade war. When asked about his take on Americans who are displeased with the inflation outlook, the Fed Chair said this displeasure is understandable since they are at the price level.

As part of the speech, the Chairman hinted at a possible 2-time interest rate cuts before the end of this year.

Market Reaction to Fed Chair Speech

The market’s volatility recently flipped bullish, drawing on broader economic indices. While keeping interest rates unchanged might help stabilize prices in the short term, lingering uncertainty remains a key headwind in the market.

As of writing, data from CoinMarketCap pegs the price of Bitcoin at $85,516.99, up by 4.30% in 24 hours. Altcoins like Ethereum, XRP, and Solana (SOL) also rallied by 7.61%, 11.85% and 7.11% within the same period.

Beyond the Fed Chair speech, the US SEC’s dismissal of the Ripple lawsuit created a short-term tailwind for the crypto market.